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Judgment of the High Court of England and Wales [2025] EWHC 964

2025-04-26 16:36

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On April 17, 2025, the High Court of England and Wales released a very interesting judgment. It concerns a question as to sovereign immunity as regards the enforcement of arbitration awards made in favor of the Claimants against the Defendant, the Republic of India, under the provisions of a Bilateral Investment Treaty (the BIT Awards).


The question for decision was whether India has submitted to the adjudicative jurisdiction of the English courts by its ratification of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (NYC). By virtue of Article III of the NYC, this was said by the some of the Claimants claiming as assignees to constitute consent by "prior written agreement" to the court's jurisdiction within the meaning of s.2(2) of the State Immunity Act 1978 (SIA), that being the relevant legislation under English law. India denied that this constitutes consent.


The key provision of the New York Convention is Article III which provides that: Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles.


The nature of state immunity as one of the fundamental principles of the international legal order has been stated in a number of recent cases. The courts in Argentum Exploration Ltd v The Silver [2024] 2 WLR 1259, and Hulley Enterprises Ltd v The Russian Federation [2025] EWCA Civ 108 cite the decision of the International Court of Justice in Jurisdictional Immunities of the State (Germany v Italy : Greece intervening) [2012] ICJ Rep 99, para 56, for the proposition that state immunity is a general rule of customary international law to which other states have an obligation to give effect (Argentum at [15], Lord Lloyd-Jones and Lord Hamblen JJSC), Hulley at [24], Males LJ).


In the Germany v Italy case at para 57, the ICJ explains that "the rule of state immunity derives from the principle of the sovereign equality of states, one of the fundamental principles of the international legal order, so that exceptions to such immunity represent a departure from that principle. … The fact that states have an obligation to give effect to state immunity in accordance with international law does not identify the exceptions to that immunity which international law recognises. For that the English courts must look to sections 2 to 11 of the State Immunity Act 1978 …" (Hulley [25-26]).


The Court’s conclusion is that Article III of the NYC preserves state immunity by its own terms, because the obligation on a "Contracting State" is expressed to be "in accordance with the rules of procedure of the territory where the award is relied upon." It is established in English law that "State immunity is a procedural rule going to the jurisdiction of a national court. It does not go to substantive law" (see Jones v Saudi Arabia, op. cit., at [24], Lord Bingham, and [44-49], Lord Hoffmann, and the other authorities cited above).


Given that Section 2(2) of the UK's State Immunity Act 1978 (SIA) provides that a state may submit to the jurisdiction of the UK courts by a prior written agreement, the Court considered that by reason only of its ratification of the New York Convention 1958 (NYC), the Republic of India has not submitted to the jurisdiction, or to put it another way, ratification of the NYC by India does not in and of itself, and absent a valid arbitration agreement, amount to consent by way of a "prior written agreement" by the state waiving its immunity. This is because (1) there is no indication that it was the intention of the drafters of the NYC to preclude immunity-based arguments in enforcement actions against states, and overall the commentary is to the effect that immunity-based arguments are not precluded, (2) applying the established classification of state immunity in English and international law, the reference to "rules of procedure" in Article III NYC preserves state immunity in its own terms, and (3) applying the test for waiver in English law, the ratification of Art III of the NYC is not, on its own, a waiver of state immunity by India.



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LAW OFFICE OF FRANCESCO SALIMBENI
CONTACTS
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info@salimbenilaw.com

621 Cromwell Avenue, Rocky Hill, CT, 06067

Via Nomentana, 133, 00161 Roma

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